Question of raising retirement age must be solved now - Kudrin

Since 2008 the able-bodied population employed in the real sector of the economy has been declining by 300,000-400,000 a year

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MOSCOW, January 19 (Itar-Tass) —— To keep Russia’s pension system in balance for years to come the problem of raising the retirement age and cancelling the possibility of early retirement should be solved already now, a former finance minister, Alexei Kudrin, said on Thursday.

Kudrin, who currently holds the position of the chief researcher at the Gaidar Institute of Economic Policies, believes that these issues should be addressed without delay.

“This is a no fast process. It will take at least five years to accomplish, but the decisions must be made already now,” he said. Kudrin explained that in ten years from now Russia would be faced with a very acute demographic problem and, as result, a shortage of the pension system. Back in 2011 the state budget disbursed an extra 875 billion rubles in subsidies to compensate for the pension system’s deficit, and by 2014 the subsidies will exceed 1.3 trillion rubles, which is equivalent to two percent of the GDP. In fact, according to the former finance minister, these are tangible resources that might be used for addressing other issues.

Since 2008 the able-bodied population employed in the real sector of the economy has been declining by 300,000-400,000 a year.

“Even if there occurs a baby boom, the economically active population will continue to reduce,” he acknowledged. In a situation like this migration will have to be resorted to.

The deficit of the pension fund is an ever more acute problem, and it will have to be addressed, even if unpopular measures will have to be employed, Kudrin said.